Κατά τη συνεδρίαση της Ομάδας Διαχείρισης Κρίσεων που έλαβε χώρα στις 30.3.2022, ζητήθηκε από τον ΔΕΣΦΑ η άμεση υποβολή μελέτη αξιολόγησης κόστους-οφέλους για την προσθήκη πλωτής δεξαμενής LNG στον τερματικό σταθμό της Ρεβυθούσας, για την ενίσχυση της ασφάλειας του εφοδιασμού της χώρας. Ο ΔΕΣΦΑ υπέβαλε στη ΡΑΕ την εν λόγω μελέτη, η οποία τίθεται σήμερα σε δημόσια διαβούλευση. Η δημόσια διαβούλευση θα διαρκέσει έως και την Παρασκευή 15 Απριλίου
- Οι ενδιαφερόμενοι καλούνται να υποβάλουν τις απόψεις τους στη ΡΑΕ με ηλεκτρονική επιστολή στη διεύθυνση gasconsultation@rae.gr ή εγγράφως. Η ΡΑΕ θα δημοσιοποιήσει κατάλογο των συμμετεχόντων στη διαβούλευση, με εξαίρεση την περίπτωση κατά την οποία ο αποστολέας αιτείται τη μη δημοσιοποίηση των στοιχείων του ή/και των απόψεών του. Cost Benefit Analysis for an FSU in Revithoussa Athens, 04/04/2022 Table of contents 1 Scope of Work Slide 3 Background Slide 4 Main findings Slide 5 The Investment Slide 6 The demand scenario Slide 7 Results of the analysis Slides 8-12 2 3 4 5 6 2 Scope of Work Aim ▪ Identify, quantify, monetize and compare Costs and Benefits of the addition of a Floating Storage Unit in the LNG Terminal of Revithoussa Simplified process to deliver first results by 1/4 1 2 ▪ Identify other positive externalities of the FSU upon the Greek energy system ▪ Assess the as-is case Alternative Scenario Tasks Tasks Assess demand and supply profiles assuming Russian Disruption keeping all other market parameters as of today without the FSU Method ▪ Having as a baseline the standard ENTSOG CBA methodology, DESFA proceeded with assessing the value of the addition of an FSU in the Revithoussa Terminal both qualitatively as well as quantitatively. 3 ▪ Assess demand and supply profiles assuming Russian Disruption keeping all other market parameters as of today with an increased storage capacity of Revithoussa by at least 150.000m3 due to the installation of an FSU ▪ Assess the effect of the FSU in the case where a planned unloading does not materialize Background Project rationale ▪ ▪ ▪ Currently, the Greek NNGTS has four import interconnection points (Revithoussa, N. Mesimvria, Kipoi and Sidirokastro). In case of a Russian gas disruption the last two will be severely affected, with Sidirokastro becoming an export interconnection point. The FSU ▪ Procurement of a converted LNG Carrier to operate as a Floating Storage Unit (FSU) vessel Desfa must ensure the maximum and non-stopping utilization of the remaining two interconnection points (Revithoussa and N. Mesimvria) for the limitation of gas curtailments in Greece. Towards that, Desfa examines the addition of a Floating Storage Unit (FSU) to the Revithoussa LNG terminal increasing its total available storage capacity from 225.000 m3 to more than 380.000 m
- ▪ Cargo capacity of at least 150.000-m3 LNG ▪ FSU will serve as additional storage and provide increased energy security at the Revithoussa LNG Terminal ▪ Possible reference period of five
(5)year charter period The existing storage capacity in Revithoussa serves the current way of its utilization which is mainly for peak-shaving purposes, however considering a potential Russian gas disruption Revithoussa will serve both as baseload and as a peak shaving facility which is only possible with an increase of its storage capacity. ▪ The option of buying the vessel is also considered ▪ Ship-to-Ship LNG transfer from visiting LNGCs 4 The CBA analysis shows that the additional storage that is made available through an FSU can optimize Revithoussa’s unloading schedule maximizing the relevant throughput; the contribution to security of supply is very important and fully verified 1 The addition of the FSU will substantially increase the overall throughput of the terminal by accommodating a much larger number of cargoes per year than it is currently possible, by relieving constraints imposed by the existing storage capacity 2 The scheduled LNG cargoes for the period from 31/3/2022 to 31/3/2023 amount to 38 TWh (46 vessels), however in the case of a Russian gas disruption an additional volume of apprx. 45 TWh (50 more vessels) of LNG would be required to cover the gap. The total of 96 vessels is impossible to be served with the existing storage capacity of Revithoussa (unloading every apprx. 3days) under the current market conditions. 3 Such a tight schedule is not sustainable under the standard industry practices and the limitations on the scheduling horizon and the available fleet of LNG carriers. Lack of storage capacity does not allow early arrivals of vessels, but need for gas does also not allow too late arrivals because a gas deficit would appear otherwise. Late arrival of any cargo would lead to additional gas curtailments 4 According to our estimations, failure of delivery of even a small cargo (500 GWh) in the high demand period, the value of loss of load in gas amounts to ~€250 million
(1). This is an extremely moderate estimation given the overall need for cargoes
(2)5 Even with the addition of FSRUs in the future, the increase storage capacity of Revithoussa will be necessary to ensure that the market have sufficient modulation to follow gas demand fluctuations considering that the lack of Russian gas pipeline flexibility and that the FSRU have obligation to fully regassify a cargo before being able to accept the next one 6 The addition of the FSU, under normal market conditions, will lead to an increase of the yearly expected gas supply equal to 27 TWh from Ag. Triada Entry point resolving a critical supply issue in the case of RU disruption reducing the need for additional measures for no gas curtailment. This may be proven valuable for the diversification of supplies in the region, even if Russian gas is not disrupted. Notes:
(1)According to ENTSOG methodology, the VOLL for gas is €600 per MWh of lost load 5
(2)A standard large cargo slot amounts to 1 TWh, while a small one to 500 GWh; The estimated number of large slots is 52 per year and of the small ones 26 per year According to the ongoing market assessment, it is preferable to buy an FSU than leasing it for the long term; However, due to the current tightness of the market, availability of vessels will be limited Leasing Option Daily Rate Yearly Cost NPV of 5 yrs CAPEX 60.000 $ /d 19,7 mil. € 87,8 mil. € OPEX 15.000 $/d (with a yearly increase of 2%) 4,9-5,4 mil. € 22,8 mil. € Total 110, 6 mil € Buying option is preferrable Buying Option Cost Yearly Cost NPV of 5 yrs CAPEX 150 mil. € - 150 mil. € OPEX 15.000 $/d (with a yearly increase of 2%) 4,9-5,4 mil. € 22,8 mil. € Residual Value 108 mil. € Total = Cost - Residual Value 62,2 mil € Notes:
(1)Commissioning year 2022
(2)Social Discount rate= 4%
(3)Exchange rate = 1,1% Demand scenario is the key parameter of the analysis, taking also into consideration IPTO’s assumptions Demand assumptions Gas supply assumptions Transmission, storage and constraints Power demand • Demand for power production for the period April 22-March 23 is based on the operation of four coal production units (scenario 4Coal of IPTO) • Aggregated demand scenario of IPTO and DESFA are in agreement • Full Disruption of Russian Gas (no gas through Sidirokastro) • Total supply from North equal to 53GWh/d (43GWh/d from N. Mesimvria and 10GWh/d from Kipi) Expected yearly throughput from Agia Triada, considering the current LNG TPA rules: • • without FSU: 38 TWh with FSU: 65 TWh Domestic non-power demand • Based on DESFA’s Demand Forecast Study 2022-2031 Exports 2 scenarios are considered: • Mean exports: 43,6 GWh/d • High exports: 65 GWh/d IPTO/ DESFA comparison on demand for PP : Natural gas for Power Production(TWh) IPTO 4 Coal IPTO 7 Coal DESFA base case 4/22-12/22 40 37 38 1/23-3/23 12 10 14 Number of LNG unloadings and quantity : Current vs with FSU 7,00 6 No TWh The addition of the FSU increases substantially the ability of Revithoussa to accommodate additional cargoes in a “business-as-usual” mode, providing stability and predictability 6,00 5 5,00 4 4,00 3 3,00 2 2,00 1 1,00 0,00 0 with FSU November Auctions 2022 with FSU October Auctions 2022 with FSU September Auctions 2022 with FSU August Auctions 2022 with FSU July Auctions 2022 half cargo with FSU June Auctions 2022 May with FSU Auctions 2022 with FSU April Auctions 2022 with FSU March Auctions 2022 with FSU February Auctions 2022 with FSU Auctions 2022 with FSU Auctions 2022 January December 1TWh Assuming that the FSU will be available from September 2022, a new schedule for unloading of vessels was designed based on best practice as well as DESFA’s experience on the market operation and reaction With the FSU the throughput of Revithoussa will increase by 27 TWh; this will accommodate 25% more demand per year and decrease the relevant deficit, leading to a potential benefit of the order of billion Euros, for Greece and the neighboring countries ~ 25% of total demand assured due to FSU *for the daily supply deficit a more detailed analysis is needed 648 mil. € per % of lost load, assuming a value of curtailed MWh equal to 600€ (as per ENTSOG’s CBA methodology) The addition of an FSU would increase Revithoussa’s storage capacity by ~ 70%, creating many benefits for the energy system
- Maximization of Revithoussa’s throughput and use as base load ▪ Currently, the LNG terminal is mainly used for peak-shaving purposes. Increasing its storage space and consequently the annual throughput, without changing the current TPA rules, will turn Revithoussa to a base load import facility, able to support also peak demand.
- Optimization of cargoes unloadings’ | scheduling ▪ Currently, large cargoes are struggling to unload due to lack of storage space. Increasing the storage space by ~70% and the regasification capacity by ~10% leads to the optimization and balancing of these 2 parameters.
- Non-violation of current market conditions ▪ Covering the pipe-gas cut-off imports from the LNG terminal will lead to stress and violate the current LNG market conditions. By increasing though the storage space, the LNG market will continue to operate under the current conditions.
- Price ▪ Following the increase of Revithoussa’s storage capacity, the unloading of large vessels (larger than 150.000m3) will be possible at one stage whithout needing to reduce the reserves of the terminal to extremely low levels (even lower than 20.000 m3) thus eliminating the need for partial LNG unloading
- Qmax flexibility ▪ Lower LNG transportation cost (no need for instalments) will lead to lower supply cost and thus to reduced prices to end consumers 3,00 Current LNG Storage space Cargo 1 Cargo 2 Cargo 3 Cargo 4 Cargo 5 Storage space Cargo 1 Cargo 5 Cargo 9 Cargo 2 Cargo 6 Cargo 10 Cargo 3 Cargo 7 Cargo 11 ▪ Each triangle shows the temporary storage space of each cargo in relation to time as it regasifies the LNG quantity in the network. ▪ In the current situation, LNG space is a limiting factor for the arrival of more cargoes. ▪ The unloading rate as well as the size of the cargoes increases significantly with the FSU addition. Cargo 4 Cargo 8 Storage Space 10/6/2022 9/6/2022 8/6/2022 7/6/2022 6/6/2022 5/6/2022 4/6/2022 3/6/2022 2/6/2022 1/6/2022 31/5/2022 30/5/2022 29/5/2022 28/5/2022 27/5/2022 26/5/2022 25/5/2022 24/5/2022 23/5/2022 22/5/2022 0,00 21/5/2022 0,00 20/5/2022 0,50 19/5/2022 0,50 18/5/2022 1,00 17/5/2022 1,00 16/5/2022 1,50 15/5/2022 1,50 14/5/2022 2,00 13/5/2022 2,00 12/5/2022 2,50 10/5/2022 11/5/2022 12/5/2022 13/5/2022 14/5/2022 15/5/2022 16/5/2022 17/5/2022 18/5/2022 19/5/2022 20/5/2022 21/5/2022 22/5/2022 23/5/2022 24/5/2022 25/5/2022 26/5/2022 27/5/2022 28/5/2022 29/5/2022 30/5/2022 31/5/2022 1/6/2022 2/6/2022 3/6/2022 4/6/2022 5/6/2022 6/6/2022 7/6/2022 8/6/2022 9/6/2022 10/6/2022 2,50 10/5/2022 With FSU= LNG Storage space flexibility 11/5/2022 TWh Twh The flexibility created by the addition of the FSU Even with a conservative comparison of benefits to costs, FSU leads to potential savings that exceed the cost of either its purchase or its lease by orders of magnitude Cost Total potential Benefits 700 600 Mil. € 500 400 250 648 300 200 OPEX 23 250 OPEX 23 100 88 -108 or 150 62 0 Value in case of delay of a 500 GWh cargo
(1)Value per % point of additional storage Leasing option (CAPEX –OPEX) Buying option (CAPEX –OPEX) Residual Value Value in case a 2nd cargo is lost, same value applies for any additional lost cargo. Notes:
(1)Historical data of late cargo arrival to Revithoussa terminal in the last five years due to issues of force majeure (eg bad weather, strikes) : 6 times
(2)The CAPEX & OPEX assumptions refer to the NPV of the period 2022-2027.